An oil well near Tioga, North Dakota.
Photograph: Karen Bleier/AFP/Getty Images

The United States has surpassed Saudi Arabia and Russia as the global leader in oil reserves, according to a report by a Norwegian consultancy firm.

“We have done this benchmarking every year, and this is the first year we’ve seen that the US is above Saudi Arabia and Russia,” Per Magnus Nysveen, head of analysis at Rystad Energy, said. He credited the rise to a sharp increase in the number of discoveries in the Permian basin in Texas over the past two years.

The report found that many, especially members of the Organization of Petroleum Exporting Countries, exaggerated the size of their reserves in self-reported surveys. Rystad Energy came to the conclusion by only recording each country’s economically viable reserves.

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Rystad found that the US had 264bn barrels of oil in reserve, ahead of Russia at 256bn barrels and Saudi Arabia at 212bin barrels.

The study also painted a grim picture for the future of oil globally. A press release accompanying the findings said, at the current rate of production oil supplies will only last 70 more years, while the number of cars will double in the next 30 years. With this in mind, the release added, “it becomes very clear oil alone cannot satisfy the growing need for individual transport”.

Electric cars currently make up a small portion of global car sales. Nysveen predicts that in 30 years, that portion will grow in Western countries but it will remain unfeasible in places where access to electricity is difficult.

American oil reserves have grown dramatically in the past two years due to improvements in technology for extracting shale. Increased productivity has cut the cost of extracting oil in half in the past two years, when compared to the price per barrel.

The process of extracting shale, known as fracking, has drawn sharp criticisms from environmentalists in the past for its excessive use of water, contamination of wells and potentially causing cancer for nearby residents. It became more prominently used when the price of oil surged in the early 2000s, making the practice economically feasible.

Despite the large reserves, the US oil market has been badly bruised by the recent drop in oil prices. Several oil companies have filed for bankruptcy in the past year, and the knock-on effects for related industries, like steel, has been devastating. Tens of thousands of jobs have been lost due to oversupply in the global market bringing the price down.

Nysveen is forecasting the price of the barrel to bottom out soon as supply is beginning to rebalance.

“At the end of the year, we will see increases again in US oil production,” he said.

The US lifted its 40-year ban on exporting oil in December last year. Despite oil and gas companies getting routed by low oil prices, some states, such as Panama, are hoping to capitalize on its new status.

“One of the first exports from the United States passed through the existing Panama Canal to Nicaragua,” said Manuel Benítez, deputy administrator at the Panama Canal Authority. Refined oil products from the US traveling through the canal have been making their way to Chile, Ecuador and Peru.

Nysveen also sees the future implications of the larger reserves as positive for the US economy. As the world’s largest consumer of oil, the reserves will help cut America’s trade deficit and strengthen the dollar, Nysveen said.

Geopolitically speaking, the large reserves will prevent oil from being used as a political tool against the United States as it can remain self-sufficient, he added.